How quick can I up mortgage.

surinterry

I have a chance to buy my council house but the down side is I owe 30K. A good friend is willing to lend me the 30K but he would want this back as quick as possible. I can get the property for 80K, I have little nest egg which I can use for the mortgage fees. Any ideas please there must be someway I can get this sorted.

Your advise would be so welcome.

Barney088

a "Right to buy" mortgage is very common, easy if yuo only want to borrow the reduced purchase price. There are loads of adverts on the TV for brokers who charge large fees, so try and aviod these. Whole of market mortgage brokers will have access to the Right to Buy market.

Securing a debt on your property AFTER you have bought it will be fraught with issues as there is a "pre-emption" period that the council will set (normally 5 years) to try and stop you selling on for profit quickly.

I'd seriously look at a Right to Buy mortgage first, nice though your friends offer is.

silvercar

I presume this 80k is a reduction of the full value because your using the right-to-buy scheme to get a discount?

What is the true value of the property?

If you buy with a 100% mortgage for 80k then get the property revalued a few months later I would have thought you could remortgage upto the full value (or maybe 95%) of the true value of the property. This would give you some, if not all of the 30k to repay your friend.

You would need to see a good broker to get the right mortgage lender in the first place that would allow you to do this down the line.

I don't know why you think you need to be free of all debt before you buy, 30k may be a bit too high but many people take out a mortgage with other debts in hand.

Remember that which ever way you push your debts around they will need paying off at some point. Are you comfortable with taking on 110k of debt?

HelpWhereIcan

The situation you describe is very common, however, there tends to be very few ways to resolve it.

When arranging a Right to Buy mortgage, most lenders will lend you the full £80,000 discounted purchase price, but restrict the amount you can borrow to 80% of the property's open market value.

The reason for this is that the lender will need the council's permission to lend any amount over the discounted purchase price. Normally the council will only allow extra borrowing for home improvements and may insist that estimates are obtained before they approve the extra borrowing.

The same restrictions apply throughout the whole of the 'pre-emption period' (usually 5 years) and any lender looking to lend you money secured on the house will need the council's permission. This can mean that your remortgage/fund raising options are restricted as some lenders will not lend on ex-council properties in the pre-emption period.

That is not to say that the situation is hopeless, I was just trying to briefly explain what the issues are.

The Northern Rock have a scheme called 'Together'. This is a mortgage that has an unsecured facility (personal loan) of up to £30,000 where the interest rate is the same as the rate on the mortgage portion. On a Right to Buy, they will lend up to 100% of the property's open market value.

They do this by lending you the £80,000 as a mortgage and provide the £30,000 to you as the personal loan. Because the personal loan is not secured on the property, they do not need permission from the council to lend you the money and this obviously avoids the problems I have given above.

Because the rate (and, if you like, the number of years the loan is over) is the same as the mortgage, it is like having a 100% mortgage.

This could avoid you having to borrow the money from your friend at alland save you having to remortgage in the short term to raise any money.

However, you need to seek formal mortgage advice from an independent to make sure that the Northern Rock suits your needs and that you are aware of all the implications such as potentially paying off your current debts over a much longer period.

Apologies for the length of my reply, but Hope this helps.